Zipcar's stock, profit rise

Chronicle News Services

Updated 8:27 pm, Friday, November 9, 2012

EARNINGS

Zipcar's stock soars as profit increases

Zipcar, the company that rents cars by the hour or day, rose as much as 24 percent Friday after reporting a third-quarter profit that topped analysts' estimates and raising the lower end of its annual profit forecast.

Zipcar finished up 16 percent at $7.00 Friday, after reaching as high as $7.50. The gain was the biggest since April 14, 2011, its first day of trading. The shares had declined 55 percent this year through Thursday. New referral and trial programs helped membership grow by 18 percent to about 767,500 in the third quarter, Zipcar said.

Net income soared more than sixfold to $4.32 million, or 10 cents per share in the quarter ended Sept. 30, compared with $651,000, or 2 cents per share, a year earlier. Analysts predicted profit of 7 cents. Zipcar raised the low end of its full-year forecast.

Zipcar said it will earn $1 million to $4 million this year, up from an August forecast of break-even to $4 million. Zipcar earned $850,000 through three quarters.

Groupon shares plunge with revenue slowdown

Groupon stock has hit a new low after the online deals company's third-quarter results showed slowing revenue growth and an ongoing decline of its core business.

The Chicago company's stock finished down nearly 30 percent at $2.76 Friday, its lowest price since Groupon went public in November 2011 at a price of $20.

The company blamed the economic weakness in Europe for a revenue shortfall in the July-September quarter.

Groupon says that its "goods" business, which sells physical products rather than restaurant coupons and the like, is growing. But analysts say that is a much less profitable business than the daily deals segment.

Walt Disney tumbles after missing estimates

The shares slumped 6 percent to $47.06 Friday following its quarterly report Thursday. Sales at the world's largest entertainment company rose 3.4 percent to $10.8 billion, trailing the average projection of $10.9 billion, based on estimates compiled by Bloomberg.

The film unit saw declines in revenue and operating income, driven by lower worldwide theatrical results and higher write-downs, while ABC's ad sales dropped because of decreasing ratings. Disney joins companies including Time Warner in reporting disappointing advertising for last quarter, said Paul Sweeney, an analyst with Bloomberg Industries.

ACQUISITIONS

The Priceline Negotiator lives after all. The company has struck a deal to buy Kayak Software for $1.8 billion in a move to expand its online travel business.

The cash-and-stock deal values Kayak at $40 a share, a 29 percent premium over its closing price Thursday. Shares of Kayak - which just went public in July - soared to $39.67 after the announcement.

Kayak allows users to compare hundreds of travel sites when looking for flights, hotels and rental cars. It sends the consumer to other websites to complete their purchases and earns fees on those referrals, although some bookings can be made directly on Kayak's website and mobile applications. It also sells advertising.

Kayak was created by the same executives who helped start other travel sites including Expedia, Travelocity and Orbitz.

Skippy peanut butter lures potential buyers

Unilever, seeking a buyer for its Skippy peanut butter brand, has attracted interest from potential suitors such as ConAgra Foods and B&G Foods, said three people familiar with the matter.

The business may fetch as much as $500 million, said two of the people, who asked not to be named because the process is private. The consumer-products company, which had sought preliminary offers by Oct. 25, intends to complete a deal by year's end, two of the people said.

Skippy, a brand created in Alameda in the 1930s, also attracted interest from Pinnacle Foods Group, the food producer owned by private-equity firm Blackstone Group, said one of the people. Unilever Chief Executive Officer Paul Polman is weighing the sale as he sharpens his focus on health and beauty banners, such as Tresemme hair products and Dove moisturizer.

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